Contrary to the common assumption and to the intentions of Russia's post-Soviet rulers, Russia does not appear to be in transition to capitalism. While some features of a capitalist mode of production have appeared in post-Soviet Russia, the working population is not being transformed into a wagelaboring class generating surplus value for a capitalist class. The new propertied class is not a capitalist class but receives the overwhelming bulk of its revenue from non-capitalist relations. The explanation for this unexpected development is found in the Western-inspired neoliberal transition strategy, which has produced, not a process of primitive accumulation, but the emergence of a non-capitalist predatory/extractive system from the former state socialist system. Russia's emerging predatory/extractive system promises continuing technological regress, demographic disaster, authoritarian rule, and possible disintegration of the Russian state.